30
Apr

Insurance in and around New Jersey

Insurance provides effective risk management through large numbers

 

Insurance is all about risk management and risk sharing. If you want effective risk management in Clark, East Brunswick, Edison, New Jersey, Union, West Orange, Westfield or Woodbridge NJ then you should speak to the experts at American Insurance.

Insurance is your protection or at least your financial protection when unfortunate things happen. And unfortunate things happen every day. It is just part of life and people have realised this since the beginning of time. People came to understand that risks need to spread among large numbers so if someone is a victim of some disaster that the consequences can be mitigated. If you walk alone in the wild the chances of a lion or wolf or some other predator attacking you is far greater than if you were part of a group. In a way insurance is similar. The risk is spread among numbers and that way the consequences of the risk can be handled when someone is a victim.

Think of the old days when cargo was shipped in multiple vessels so if one vessel perished, the whole cargo would not be lost. Modern day insurance developed from these concepts. Whether we are talking about property insurance, car insurance, medical insurance or business insurance, the basic concepts are the same. An insurance carrier will collect premiums from large numbers and insure each contributor against financial loss as a result of specified risks. The insurance company receives premiums from hundreds of thousands of people and since only a certain percentage of people will be a victim of an accident or other misfortune, there is enough to go around – enough to make the insurance company wealthy and enough to cover you if you are the unlucky one.

For effective risk management in today’s world you do need some insurance, be it life insurance, home insurance, disability insurance, liability insurance or business insurance.